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banking terms

By Victor S. Fischer
  ✍️ CRR Cash Reserve Ratio is the minimum fraction of total deposits of a bank’s customers that banks have to hold as reserves with the central bank. ✍️ SLR Statutory Liquidity Ratio is the ratio of liquid assets to the net demand and time liabilities. ✍️ LAF Liquid Adjustment Facility is a tool to allow banks to borrow money through repurchase agreements. It consists of repo and reverse repo operations. ✍️ MSF Marginal Standing Facility allows scheduled banks to borrow funds overnight from RBI against approved government securities. ✍️ MSS Market Stabilization Scheme is a monetary policy intervention by RBI to withdraw excess liquidity by selling government securities in the economy. ✍️ OMO Open Market Operations refers to the buying and selling of government securities in the open market so as to expand or contract the amount of money in the banking system. ✍️ REPO Repo...
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Regulatory (Apex) Bodies in Financial sector in India

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RBI (Reserve Bank of India)


RBI was established in April 1935 under Reserve Bank of India, 1934.


On the recommendation of Hilton-Young Commission.


Central Bank of India which was nationalized in 1949.


Central office initial was established in Calcutta and later moved to Mumbai in 1937.


Official Directors- Governors and not more than fourdeputy governors.
Currently following persons are on following posts-
Governor- Dr Urjit R. Patel


RBI performs his function under the guidance of the Board of financial supervision.
Board for Financial Supervision (BFS)-
Constituted in November 1994.The Board is constituted by co-opting four Directors from the Central Board and is chaired by the Governor.


Important Acts Administered by RBI-
(i) Reserve Bank of India Act, 1934
(ii) Public Debt Act, 1944/Government Securities Act, 2006
(iii) Government Securities Regulations, 2007
(iv) Banking Regulation Act, 1949
(v) Foreign Exchange Management Act, 1999
(vi) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002
Other Relevant Acts-
(i) Negotiable Instruments Act, 1881
(ii) Companies Act, 1956/ Companies Act, 2013
(iii) Deposit Insurance and Credit Guarantee Corporation Act, 1961
(iv) Regional Rural Banks Act, 1976
(v) National Bank for Agriculture and Rural Development Act, 1981
(vi) National Housing Bank Act, 1987
(vii) Competition Act, 2002
(viii) Indian Coinage Act, 2011


RBI has 20 Regional offices and 11 Sub Offices


Following are the fully owned subsidiary of RBI-
(i) Deposit Insurance and Credit Guarantee Corporation of India (DICGC)
(ii) Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL)
(iii) National Housing Bank (NHB)


First governor of RBI- Sir Osborne Smith
First governor of RBI after nationalization- C. D. Deshmukh
First women Deputy Governor of RBI -K.J.Udeshi.


RBI Emblem: Tiger and Palm tree


SEBI (Securities and Exchange Board of India)


Established in April 1992 under SEBI Act, 1992.


Regulator for the securities market in India.


Headquarters- Mumbai


Current Chairman- Ajay Tyagi


The Forwards Market Commission, the commodities market regulator, was merged with the Securities and Exchange Board of India in December 2015.


IRDAI (Insurance Regulatory and Development Authority of India)


Apex Body in the insurance sector in India.


Based on Insurance Regulatory and Development Authority Act, 1999.


Established on the recommendation of Malhotra Committee report of 1994.


Headquarter- Hyderabad, Telangana


The Body consists of 10 members-
(a) Chairman (b) Five full-time members (c) Four part-time members.


Current Chairman- T. S. Vijayan


NABARD (National Bank for Agriculture and Rural Development)


Apex development financial institution in India.


Headquarter- Mumbai


Established in July 1982 under NABARD Act 1981.


On the recommendation of B. Sivaraman Committee.


Replaced the RBI’s Agriculture Credit Department and Rural Planning and Credit cell.


It is a specialised bank for Agriculture and rural development in India.


Rural Innovation Fund and Rural Infrastructure Development Fund have been set under NABARD.


Important Functions-
(i) Recommends about licensing for RRBs and Cooperative banks to RBI.
(ii) Refinances the financial institutions which finance the rural sector.


Current Chairman- Dr Harsh Kumar Bhanwala


SIDBI (Small Industries Development Bank of India)


Established in April 1990 under SIDBI Act, 1989.


Provide refinance facilities and short-term lending to industries and MSME’s.


Headquarter- Lucknow


Associates of SIDBI-
(i) Credit Guarantee Fund Trust for Micro and Small Enterprises- provides guarantees to banks for collateral-free loans extended to SME.
(ii) SIDBI Venture Capital Ltd
(iii) SME Rating Agency of India Ltd. (SMERA)- Provides composite ratings to SME. 
(iv) ISARC - India SME Asset Reconstruction Company in 2009, as specialized entities for NPA resolution for SME.


MUDRA Bank is a subsidiary of SIDBI.


EXIM (Export-Import Bank of India)


Premier export finance institution in India


Established in 1982 under EXIM Act 1981.

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